Of the $9.2 billion marketers spent in last year's broadcast upfront, an estimated $300 million was directed at digital plays. This year, with all the broadcast networks ramping up online offers, that amount could easily double, and some estimates predict as much as $1 billion. But still, the question remains: With its current mind-set and structure, can the upfront become the place to buy both 30-second spots and more complex interactive deals?
Early signs that the direction of TV buying would merge with interactive buying began last year, as marketers, media agencies and TV sellers began to sort through digital offerings and figure out which silo within the media agencies should handle the deals. Many media agencies have given digital buyers a permanent place on the client team, and TV buyers say they're immersed in learning the language of emerging media. But what still needs to be bridged is the vast divide in how TV buyers and interactive buyers approach ad deals. And what remains to be seen is whether these arrangements will result in marketers getting the best value.
Those who sell TV for a living aren't so well-versed in the language of an interactive sell. And even if they get their salespeople schooled in costs per click and costs per view, that doesn't mean the people across the desk will be receptive. As digital giants such as Yahoo know all too well, getting TV-focused media agencies -- used to wheeling and dealing in a $60 billion TV marketplace -- to drop talk of reach and frequency and start focusing on contextual, behavioral and value considerations is no easy task.
"It's becoming a strategic battlefield instead of a cost battlefield," said Page Thompson, CEO of OMD North America.
Online's short shrift
James Warner, exec VP at Avenue A/ Razorfish, is a former CBS TV president. He offered an example of the short shrift given to online properties during last year's inaugural digital upfront: "The upfront is deal-driven as opposed to media-driven. Say NBC is selling the 'Today' show in the upfront. They will offer a certain amount of gross ratings points against different demographics to advertisers; for the digital property they'll take 5% of the buy and put it against the 'Today' show online."
The only problem is that when deals are done this way, digital buyers don't know what they're getting, he said. The conversation a digital buyer might have had would focus instead on online "Today" show surfers who live in certain markets and are interested in buying a car.
Confusion at the agency level about what digital buys are worth is compounded by what's happening on the other side, as traditional sales executives butt heads with their online counterparts. Jeff Ratner, managing partner at MindShare Interaction, said few places were set up to execute last year's upfront offerings on other platforms.
"We ran into a case where we were buying election coverage for our clients and we're hearing something different from the TV guys and the online guys about how much inventory was available," he said. That put him in a tough spot with a client.
Who sits at the table
The most powerful buyers within a media agency have been those who sat atop the TV budgets. This was a group of people who were trained to negotiate hard to get the best price for the most volume and are, by and large, the most senior and experienced within the agencies. The default position for most media-buying agencies is to pull an interactive or digital buyer in to sit at the table with these TV buyers in an effort to bring along the next generation. At MediaVest, for example, broadcast buyer Donna Speciale is now president-investment and activation and looks at properties across the board for the likes of Kraft Foods and Coca-Cola Co.
MediaVest's Eric Bader, senior VP-director of digital connections, said the agency structure has people schooled in digital-speak embedded into client groups on the major agency relationships. For smaller clients, that effort has been more of a recent development. The agency also renamed its broadcast group Video Investment Group, a name shared by sibling Starcom, where Chris Boothe is president-activation and oversees broadband opportunities.
At Initiative, former Director National Broadcast Tim Spengler stepped up as chief activation officer, overseeing all spending from TV to online and all points in between. Meanwhile, PHD named John Swift managing director in charge of all buying. Mr. Swift told Ad Age recently he's thinking long and hard about the best ways to value digital media for the client.
These broader roles require executives to pick up the new digital lingua franca either by osmosis or by co-opting colleagues.
Yahoo's audacious aim
Yahoo, for one, sees opportunity in the media agencies' conversion. It's already executed a major "Broadway" stage event that gave TV media buyers an education in buying digital properties. Hundreds of media-agency executives attended "Broadband on Broadway" on Feb. 13 and mingled over Yahootinis to explore ad opportunities such as marketing around Yahoo communities focused on hit shows such as ABC's "Lost." The audacious aim of the event was to persuade traditional media agencies and the marketers whose money they spend to consider shifting to digital not just a portion of their TV spend but the entire budget.
"This is an opportunity to examine some of the classic metrics by which we have planned and bought media," said Wenda Harris Millard, Yahoo's chief sales officer. "I would contend that the plethora of choice is not about reach; it's about connection and engagement and we have terrific ways to measure that." Mr. Swift on the other hand, while applauding Yahoo's efforts to make the sell as the place to chase the 18- to 34-year-olds, said he does not want to see another channel insert itself into the already-complex process.
Despite Yahoo's best efforts, digital might have to remain the side dish at the upfront, even if it becomes the heart of the buy outside the traditional upfront process.